Definition of Upselling
Upselling is a sales technique aimed at persuading a customer to purchase a more expensive item, upgrade, or add-on than what they originally intended to buy. The ultimate goal is to increase the total sale value and increase the revenue of the business, using upselling as a tactic. That is the standard definition on paper, but in reality, upselling is worse than that. Upsellers always claim to enhance the customer's experience by offering them products or services that provide greater value or additional benefits.
Have you ever tried buying a product or subscribing to a service on a budget but ended up paying 10 times above what was budgeted for? Did you feel like you were short-changed, overcharged, or that somehow you gained some extra value that justifies the reckless spending spree you just embarked upon? Well, you were upsold!
Many companies deploy this tactic but it is more brutal in the business formation industry. The target are always unsuspecting first-time entrepreneurs who have little or no business experience. These elderly folks need guidance due to their age and inability to comprehend as they ought to, or non-native speakers, especially those who do not understand the English language fluently. These categories of folks rely on the expertise, trustworthiness, sincerity, and experience of the customer service representative and thus, are blindsided by the fact that they are actually dealing with sales personnel of the most draconian breed.
Companies in this space specifically set out to train sales agents to upsell you. These sales agents, also called business formation specialists or business formation representatives, are trained for several months and armed with a phone, a computer, and a script that they have to strictly adhere to.
4 signs and components of upselling
There are some easily recognizable tricks associated with upselling. Being able to read the magician's hands and spot the crafty card switch will save you a lot of money and ensure that you purchase services and tools that you need to start, run, and grow your business, as opposed to paying some ridiculous amount for packages that you might never need.
1. Higher-Value Options
Encouraging the purchase of a higher-end product or service compared to what the customer is currently considering. In this scenario, the business formation specialist and or company will be trying hard to convince you why the higher-end product or package will serve you and your business better.
2. Upgrades
When the agent begins to suggest enhanced versions of the product or service, often with added features or superior quality, watch out!
3. Add-Ons
When the sales representative or in this case, the business formation specialist, starts proposing additional products or services that complement the main purchase, such as extended warranties, better service options - based on certain monthly or annual subscriptions, accessories, or so-called complimentary items, take time to consider if those add-ons are valuable to you and do not rush into purchasing because the offer sounds juicy. That is what most business formation specialists are trained to do. Propose an offer that seems too good to be true.
4. Compliance-Based Threats
When running a business, there are certain rules and regulations that you must comply with or face penalties from the State. The Secretary of State requires that companies stay up to date and or in compliance with State laws that govern business operations within the State. For instance, companies must submit their annual reports( bi-annual reports in some cases) when due. Companies must maintain a registered agent on file at all times. This is a very crucial compliance standard. Find out about registered agent services here. The FinCEN also mandates all companies to submit their "Beneficial Ownership Information Report" under the Corporate Transparency Act (CTA). Find out more about the BOIR here.
While these compliance standards are valid and must be adhered to, most business formation specialists or representatives who work in business formation and incorporation services (companies) are trained to drive fear to your heart in order to get you to quickly whip up your credit or debit card and make purchases based on the fear of penalties, imprisonment, fines, closure of your business entity, etc. It is at that point that upselling tactics become deceptive as the customer is offered various products and services that a simple Google search can resolve. Some sell a product or offer a service called "compliance calendar" for as much as $299 annually. The work of the product is to send you a text message reminding you that the time to file your annual report is due. Writing the date of your business registration anniversary, marking a calendar on your phone or the wall, or googling the annual filing season for your state, provides the accurate information you require. Upselling tactics driven by the fear of non-compliance take money out of your pockets that could have been used for other important aspects of your business. The government is here to help your business succeed and not to destroy it. They also benefit when your business prospers, so do not allow business formation specialists to pull a cheap card trick on you. Act out of wisdom and not out of fear. That is why at Prompt Biz, we do not offer unnecessary products or services to clients nor do we employ upselling tactics in our operations. We remind our clients of key timeframes for free. It takes just a simple email or text message to do that.
Business Formation
Business formation is an important but simple process of getting a business registered with the State and staying compliant, but the business formation industry has one of the most draconian upselling parameters because of the somewhat legal terminologies used in the process on the various government websites like that of the IRS or the Secretary of State (all 50 States have an SOS website but we have linked that of Texas here for reference). These terminologies can appear very intimidating or seem very daunting to many who prefer to use business formation services. Business formation services and or companies, play a crucial role in helping millions of people navigate the crucial business formation process by breaking down those legal terminologies into simplified language that non-legal and or every common person can understand, by creating templates and processes that make the entire process easy to navigate, even from the comfort of your home without much supervision, by automating the entire process similar to what Prompt Biz has done, by providing packages that makes it easy to start, run and grow your business all in one place, etc. However, some business formation services have intentionally decided to prey on people using a bunch of trained business formation specialists or representatives (sales agents), arming them with a phone and putting them in a call center( sometimes many miles away from the country you are registering the business in) to upsell unsuspecting clients and rip them off their hard-earned money.
Note:
Effective upselling involves understanding the customer's needs and preferences, and then presenting options that align with their interests and add value to their purchase. It's important for upselling to be done ethically, ensuring that the customer genuinely benefits from the suggestions without feeling pressured. However, upselling can be greatly abused when the only intention is to increase the bottom line of the business formation company without any regard to the entrepreneur or small business owner. This is why Prompt Biz Inc. was created.
Prompt Biz is a business formation, artificial intelligence, and business education company. As entrepreneurs, founders, and creators, we got fed up with the relentless upselling tactics used by business formation companies to rob hard-working small business owners and entrepreneurs of their hard-earned money, so we created a single, simple, and easy-to-use platform with a motto of "zero upselling" to ease the pain of founders and offer them only the exact resources and tools they need to start, run, and grow their businesses. We strongly believe that entrepreneurs can start and grow their businesses without breaking the bank. Check out what we offer here
Want to start a business and avoid upselling and other BS? Prompt Biz can help
Written by Kanayo Ogwu, Founder and CEO, Prompt Biz Inc.
Comments